FTM → Is Fantom Gearing Up For a Short Scalp Opportunity? Yes.
FTM broke out of its bull trend, failed to break above the Daily 30EMA and fell back down to $0.375. With Bitcoin and the rest of the crypto market following suit, are we ready to short?
How do we trade this? 🤔
Since my last FTM analysis, I provided this updated chart depicting what I believed was a likely outcome of the price action. A pullback from the downward momentum to the Daily 30EMA followed by a failure to break it:
FTM has begun to test the 30EMA and we have several data points that suggest a counter-trend trade is reasonable (probable); FTM has given us two legs down since breaking the bull trend, failed to break above the Daily 30EMA, RSI at 44.00 and below the moving average which gives FTM some room to fall.
If you're not already in a short, then we need to wait for another confirmation before a trade is justified. What we need is a final test and failure to break the Daily 30EMA around the price area of $0.40. From there, we can short half of our position to the low of the current candle ($0.375), take profits, move our stop loss up to our entry price, and then swing the rest of the position down to the Daily 200EMA support at $0.325.
Taking profits at the 200EMA is about a 1:1 Risk/Reward if our stop is placed just above the previous leg high at $0.445. That is a reasonable scalp, and the rest, being a bit lower probability of success, allows us to swing the second half of our position without the worry of losing money. We have to keep in mind that we're two legs into a micro bear trend after a three-legged bull run, this could be a two-leg trap. That's why we need confirmation below the Daily 30EMA to justify a short.
💡 Trade Idea 💡
Short Entry: $0.4175
🟥 Stop Loss: $0.4600
✅ Take Profit #1: $0.3750
✅ Take Profit #2: $0.3325
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Two legs down since breaking the bull trend
2. Failed to break above the Daily 30EMA
3. 9th Daily Candle Just Closed Below 30EMA
4. RSI at 44.00 and below the moving average which gives FTM some room to fall.
5. Bitcoin Showing Strong Reversal Signals, Impacts Market Sentiment.
💰 Trading Tip 💰
It's reasonable to take half profits at the first support target in a short trade, or the first resistance target in a long trade. You can then move your stop loss up to your entry price and watch the rest of the trade execute without worry of losing money. This helps improve trading psychology and the equity in your account.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
How do we trade this? 🤔
Since my last FTM analysis, I provided this updated chart depicting what I believed was a likely outcome of the price action. A pullback from the downward momentum to the Daily 30EMA followed by a failure to break it:
FTM has begun to test the 30EMA and we have several data points that suggest a counter-trend trade is reasonable (probable); FTM has given us two legs down since breaking the bull trend, failed to break above the Daily 30EMA, RSI at 44.00 and below the moving average which gives FTM some room to fall.
If you're not already in a short, then we need to wait for another confirmation before a trade is justified. What we need is a final test and failure to break the Daily 30EMA around the price area of $0.40. From there, we can short half of our position to the low of the current candle ($0.375), take profits, move our stop loss up to our entry price, and then swing the rest of the position down to the Daily 200EMA support at $0.325.
Taking profits at the 200EMA is about a 1:1 Risk/Reward if our stop is placed just above the previous leg high at $0.445. That is a reasonable scalp, and the rest, being a bit lower probability of success, allows us to swing the second half of our position without the worry of losing money. We have to keep in mind that we're two legs into a micro bear trend after a three-legged bull run, this could be a two-leg trap. That's why we need confirmation below the Daily 30EMA to justify a short.
💡 Trade Idea 💡
Short Entry: $0.4175
🟥 Stop Loss: $0.4600
✅ Take Profit #1: $0.3750
✅ Take Profit #2: $0.3325
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Two legs down since breaking the bull trend
2. Failed to break above the Daily 30EMA
3. 9th Daily Candle Just Closed Below 30EMA
4. RSI at 44.00 and below the moving average which gives FTM some room to fall.
5. Bitcoin Showing Strong Reversal Signals, Impacts Market Sentiment.
💰 Trading Tip 💰
It's reasonable to take half profits at the first support target in a short trade, or the first resistance target in a long trade. You can then move your stop loss up to your entry price and watch the rest of the trade execute without worry of losing money. This helps improve trading psychology and the equity in your account.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
Trade closed manually:
FTM, like Bitcoin, has failed to break toward the downside. We have several wicks on the bottom of candles, the sideways price action has gone on too long, reducing the probability of profit toward the downside. Extended trading ranges in this setup increases the probability that the price will reverse from its initial direction, so its best we pull out now and wait for another entry. I believe Bitcoin will have a significant pullback in the coming days and weeks, the alt coin market will likely follow.
You can see my current open trade over at USDCAD where take profit #1 was just hit:
My second take profit target was just hit for USDJPY and that trade is now closed as a result. 120 pips on the first take profit and 245 on the second:
I just closed my Bitcoin trade for the same reasons as FTM:
FTM, like Bitcoin, has failed to break toward the downside. We have several wicks on the bottom of candles, the sideways price action has gone on too long, reducing the probability of profit toward the downside. Extended trading ranges in this setup increases the probability that the price will reverse from its initial direction, so its best we pull out now and wait for another entry. I believe Bitcoin will have a significant pullback in the coming days and weeks, the alt coin market will likely follow.
You can see my current open trade over at USDCAD where take profit #1 was just hit:
My second take profit target was just hit for USDJPY and that trade is now closed as a result. 120 pips on the first take profit and 245 on the second:
I just closed my Bitcoin trade for the same reasons as FTM:
-Joe Dean
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FTM short trade entered at $0.3962, Take Profit #1 half of your position at previous low of $0.3565, Take Profit #2 just above the Daily 200EMA support at $0.3325. Use a smaller position size on this currency pair as alt coins are more volatile which involves higher initial risk. Once the first take profit is hit, move the stop loss up to $0.435 to ensure the Risk/Reward remains at 1:1 with the profit taken. This reduces your loss if the price action reverses, but allows you to capture the full trade if the price action continues to the Daily 200EMA support.
FTM's price action is weak bulls failing to break the 4HR 30EMA and the RSI coming back up to the Moving Average with room to fall. We were not going to get our 1:2 Risk/Reward entry price as originally state. We reduce our position size to weigh against the increased amount of initial risk and take the trade now in a different form.